DEVS 100 Lecture 20: Week 10 – Debt and Financialization

• School: Queen's University
• Department: Global Development Studies
• Course: DEVS 100
• Professor: David A Mc Donald

Document Summary

Week 10 debt and financialization; fair trade. Portfolio capital may flow in or out of a developing country rapidly which can result in financial instability or a balance-of- payments crisis: heavily indebted poor countries initiative an arrangement made in 1996 among the. Funds may be used to repress the population: fair trade a trading partnership based on transparency and respect that seeks greater equity in international trade. Creation of opec in 1973: organization of petroleum exporting countries. Money invested in private banks, mostly in the us: (cid:862)petrodollars(cid:863) Northern banks lend out deposits to make money loan billions to states in the south: encouraged by western countries, promote capitalism, cold war politics. No ethics principles by lenders: corrupt regimes, dictators, apartheid state loans spent on unproductive things, military, white elephant projects, etc. (cid:272)o(cid:374)sidered (cid:858)safe(cid:859) (cid:271)e(cid:272)ause so(cid:448)ereig(cid:374) de(cid:271)t. Economic crisis of 1980s interest rates rise dramatically recession in the north commodity prices collapse. Debts become difficult to pay in the south.